PG&E Creates $100M Fund For SunRun Solar Projects

PG&E (s PCG) might not be winning over hearts and minds when it comes to its smart meter project or pushing propositions, but the utility has been getting pretty creative in terms of new ideas for home solar financing. This morning PG&E announced that it will create a $100 million tax equity fund, via a corporate subsidiary called Pacific Energy Capital II, that will fund solar residential installations with startup SunRun. The two companies say the fund will be “the largest residential solar financing vehicle established to date,” and the project follows in the footsteps of a similar program that PG&E created with SolarCity announced earlier this year.

The problem with home solar systems is, frankly, they’re expensive and paying the tens of thousands of dollars upfront to install them on rooftops is a daunting offer to potential customers. San Francisco-based SunRun provides homeowners with solar financing options, and customers can agree to a contract where they pay a monthly fee over many years, with little or no upfront fee.

Advertisement

The PG&E/SunRun home solar tax equity fund will be able to provide financing for “more than 3,500,” new residential solar installations, say the companies. In contrast the $60 million project with SolarCity is supposed to provide financing for 1,000 solar systems (I’m not sure why SunRun’s fund will be able to stretch farther, but will update this when I know.)

Late last year SunRun announced a tax equity commitment of $90 million from US Bancorp to finance solar installations in 2010, and in 2008 it scored another $105 million commitment from a US Bancorp affiliate. SunRun is backed by Foundation Capital and Accel Partners.

California has a state-mandated goal (Renewable Portfolio Standard) that says utilities must deliver 20 percent of their electricity generated by renewable energy by 2010, and PG&E has been taking a more active role compared to other utilities in trying to reach that goal. Last year PG&E announced that under a program that will run five years it would build out solar photovoltaic projects that together would produce 500 MW of power, 250 MW of which it will own outright.

For more research on cleantech financing check out GigaOM Pro (subscription required):